Why we should turn off the economy’s deep freezers, By Uddin Ifeanyi

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Admittedly, a key goal of reforms to an underperforming economy such as ours is to discipline consumption.

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One unintended consequence of the Minister of Power’s recent intervention in the domestic policy conversation was to move the phrase “turn off the deep freezer” into the same high-octane league as “off your mic.” The problem with the power minister’s suggestion was to move the idea of demand management into paternal territory. This problem is at once ethical, as it is functional.

Unfortunately, even when higher costs of procuring goods and services force their more efficient consumption, a country is best served when services and goods providers operate in competitive markets. Rather than mount the bully pulpit, Chief Adelabu would serve the domestic power sector best by reducing monopoly behaviour therein. A competitive market would require free exit and entry of both consumers and suppliers of electricity.

The goal of improving the efficiency of markets goes beyond the needs of our decrepit power sector. Accordingly, a further challenge before a reform-minded government would be to integrate the domestic market for goods and services. At first blush, this requirement sounds counter-intuitive. But within states, barriers to entry into markets are as potent and as inhibitive of commerce and trade, as are those between states.

 

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